Excess and Surplus Lines

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Richard Bouhan, Executive Director of the National Association of Professional Surplus Lines Offices (NAPSLO), recently stated that the National Association of Insurance Commissioners (“NAIC”) is attempting to undercut the surplus lines reforms in the Nonadmitted and Reinsurance Reform Act (the “Act”), which becomes effective on July 21, 2011. …
Read More NAPSLO Questions NAIC ‘s Handling of the Nonadmitted and Reinsurance Reform Act

Unlike other several other states as we reported here, New York has enacted legislation as part of its budget bill that does not authorize the state to enter into the Surplus Lines Insurance Multi-State Compliance Compact (“SLIMPACT”), or any other surplus lines tax allocation compact.  SLIMPACT is an interstate compact that is designed to, among other things, allow for the adoption of uniform standards across participating compact states and uniform tax allocation formulas on multi-state risks. …
Read More New York Rejects SLIMPACT

A Massachusetts federal judge has found that violations of a fee-sharing agreement between a lawyer and his former firm do not constitute legal services, and therefore do not fall within the scope of coverage afforded by the lawyer’s professional malpractice policy.
Read More Fee Dispute Between Lawyer and Former Firm Not Covered by E&O Policy

This updates our May 13, 2010 blog posting.  Last month, the New Jersey legislature passed the “Reinsurance and Surplus Lines Stimulus and Enhancement Act” (A2670, the “Act”).  The Act amends state law to permit surplus lines insurers domiciled in New Jersey to write surplus lines insurance in the state.  This would make New Jersey the second state in the U.S. after Illinois to allow its domestic surplus lines companies to write insurance in the home state’s surplus lines market. …
Read More New Jersey Passes Legislation to Ease Restrictions on Surplus Lines and Credit for Reinsurance

In Columbia Casualty Co. v. Gordon Trucking Inc. et al., No. 09-CV-05441, 2010 WL 5141865 (N.D. Cal. Dec. 13, 2010), a truck owned by the insured was involved in a severe car accident. The insured had a $5 million primary policy, a $5 million first layer excess policy, a $20 million second layer excess policy, and a $20 million third layer excess policy. After its initial claim review, the first layer excess carrier told the insured that it did not believe its layer would be impacted by the underlying personal injury suit arising from the car accident. …
Read More Excess Insurer Required to Show Actual Prejudice to Avoid Paying Settlement it did not Consent to

We recently blogged about the Second Circuit’s decision in Arrowood Surplus Lines Ins. Co. v. Westport Ins. Corp., No. 10-cv-0397 (2d Cir. 2010), in which an appellate panel held that a reinsurer had no obligation to indemnify its cedent for losses outside the scope of the treaty at issue.  Click here to review a copy of that blog post.
Read More Second Circuit Denies Cedent’s Motion for a Rehearing in Follow the Fortunes Case